Bass Pro Shops, the Springfield, Missouri-based outdoor sports retailer, has agreed to buy competitor Cabela’s Inc. for $65.60 a share in cash, valuing the deal at about $5.5 billion.
Sidney, Nebraska-based Cabela’s (NYSE: CAB) announced the deal Monday, ending a week of speculation. The deal is expected to close in the first half of 2017, subject to approval by Cabela’s shareholders and regulators. Johnny Morris, founder and CEO of Bass Pro, will lead the merged, privately held company.
Bass Pro Shops has secured $2.4 billion in preferred equity financing for the deal, consisting of a $1.8 billion commitment from Goldman Sachs and a $600 million commitment from Pamplona Capital Management.
The $65.50-per-share price is a premium of 19.2 percent to Cabela’s closing price Friday.
The agreement also calls for Bass Pro, after the deal closes, to begin a multiyear partnership with Capital One NA, a banking subsidiary of Capital One Financial Corp. (NYSE: COF), under which Capital One will service the Cabela’s CLUB, Cabela’s co-branded credit card, officials said. Capital One plans to continue operating the Cabela’s CLUB servicing center in Lincoln, Nebraska.
Points in both retailers’ rewards programs, Bass Pro Shops Outdoor Rewards and Cabela’s CLUB, will be unaffected by the transaction, officials said.
Immediately prior to closing, Capital One will acquire certain assets and assume certain liabilities of Cabela’s World’s Foremost Bank, officials said.
Cabela’s announced in December that it was working with Guggenheim Securities to explore strategic alternatives, including a possible sale, after coming under pressure from an activist fund. It was reported in April that Bass Pro was teaming up with Goldman Sachs Group to make a bid for Cabela’s.
Cabela’s employs over 19,000 in its 85 specialty retail stores, primarily in the western U.S. and Canada. It has one store in the St. Louis area, in Hazelwood.
Bass Pro Shops has 99 stores and Tracker Marine Centers primarily in the eastern U.S. and Canada, including a store in St. Charles. It employs about 20,000. White River Marine Group, whose brands include Tracker Boats, Sun Tracker and Nitro, is part of Bass Pro.